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11th Cir.: “Dual Assignment” Regulation Still In Full Affect; Whether An Employee With Police And Fire Duties Is Entitled To Overtime Based On Which Duties Take Up Majority Of Working Time
Cremeens v. City of Montgomery
The Appellants, fire investigators for the City of Montgomery’s fire department, appealed the dismissal via summary judgment of their collective action seeking overtime pay from the city. Their appeal raised the question of the continuing validity of the Department of Labor’s dual assignment regulation, which addresses overtime for firefighters who perform law enforcement duties. The Eleventh Circuit concluded that the regulation remains valid and therefore, reversed the judgment of the district court.
In addition to describing the Plaintiff’s firefighting duties and fire suppression training, the Court explained that, “Fire investigators investigate fires involving loss of life, arson and other crimes, and multiple fire alarms. They gather physical evidence, interview witnesses, interrogate suspects, and testify in court. They have the power to make arrests without first calling the Montgomery police department. Candidates for the job of fire investigator must graduate from state and national fire investigation academies; graduate from the Montgomery police academy; and be certified by the state as a peace officer. Candidates also must pass continuing education and firearms qualifications.” Thus, the record demonstrated that Plaintiffs perform both police duties and firefighting duties.
Reasoning that the “Dual Assignment” Rule continued in full effect, notwithstanding the revised definition of those engaged in firefighting duties (and thus exempt), the Court explained:
“Similarly, because the plain language of the dual assignment regulation does not purport to alter § 203(y)’s definition of an employee engaged in fire protection activities, it skirts the province of § 203(y) and does not conflict with it. The simpler reading of the dual assignment regulation is that it dictates how to apply the overtime rules to those employees who have already satisfied the definitions both for fire protection and law enforcement. The dual assignment regulation does no defining. It is fair to say that while § 203(y) defines, the dual assignment regulation applies.
This analysis explains why our well-reasoned precedents in Huff and Gonzalez do not control here. For one, neither of those cases addressed the dual assignment regulation. Rather, those cases held that the regulatory definition of fire protection activities and the 80/20 rule by their texts purported to alter § 203(y)’s definition of an employee engaged in fire protection activities. The 80/20 rule stated, after all, that “[a] person who spends more than 20 percent of his/her working time in nonexempt activities is not considered to be an employee engaged in fire protection or law enforcement activities for purposes of this part.” 29 C.F.R. § 553.212(a) (emphasis added). Therefore the regulations had to yield to the statute, and were deemed obsolete. And lastly, the analysis in Huff and Gonzalez centered on whether the plaintiffs there satisfied § 203(y)’s requirement for a “responsibility” to fight fires. Here, the plaintiffs have already conceded § 203(y) applies to them.
The city nevertheless urges us to apply a broader interpretation of Huff and Gonzalez to this case-to conclude that § 203(y) mandates, without exception, firefighter overtime for anyone who fits the statute’s definition of firefighter. The city argues that the dual assignment regulation must fall because it creates an exception to § 203(y). It essentially claims that what the 80/20 regulation did through its text, the dual assignment regulation does in its effect. Therefore, concludes the city’s argument, the dual assignment regulation poses a “direct conflict” to the operation of § 203(y). The district court adopted this line of reasoning, concluding that 29 C.F.R. § 553.213(b) “further refined” § 203(y)’s definition of an employee in fire protection activities in the same way the 80/20 rule did. Mem. Op. and Order 12. The district court concluded that the dual assignment regulation posed an “inherent conflict” with § 203(y). Id. 13.
We find no conflict between § 203(y) and the dual assignment regulation, and we reject the broader reading of Huff and Gonzalez that the city urges. The plain words of the regulation create no problematic interaction with the statute, in the way the regulations at issue in Huff and Gonzalez did. Therefore those cases do not control the outcome here.
We also note that in order to effectuate the FLSA, Congress, in passing § 203(y), clearly relied on the existence and operation of numerous pre-existing DOL regulations. One such regulation, by way of example, is regulation 29 C.F.R. § 553.230, which specifies the numerical overtime ceilings for firefighters and law enforcement employees. It is not unreasonable to conclude that Congress, in passing § 203(y), was also aware of the dual assignment regulation, implicitly relied on it, and thereby ratified its continuing application.
One last issue bears addressing. The district court identified a second ground for finding the dual assignment regulation obsolete: the dual assignment regulation invokes the obsolete regulations for fire protection activities and the 80/20 rule. However, we do not find such citation, by itself, disabling. Rather, it is easy to read the dual assignment regulation as importing and applying § 203(y)’s updated statutory definition of an employee in fire protection activities as seamlessly as it once applied the now-obsolete regulatory definition. And, the mention of the 80/20 rule in 29 C.F.R. § 553.213(a) has no bearing on the operation of the dual assignment provision in 29 C.F.R. § 553.213(b).”
Thus, the Court held that the “dual assignment” regulation, which provides that, when public employee qualifies both as fire protection and law enforcement personnel, he receives overtime according to rules for activity that takes up majority of his working time, was not definitional and did not conflict with updated statutory definition of “[e]mployee in fire protection activities,” so as not to be rendered obsolete by amendment of statute.
The full opinion is available at Cremeens v. City of Montgomery.
11th Cir.: Although § 255(a)’s Statute Of Limitations Is An Affirmative Defense That Must Be Specifically Pled, Defendants Sufficiently Did So With Language Referencing 2-3 Year Period In Their Pleadings
Following a jury verdict in favor of the Defendants, the Plaintiff appealed, based on a jury instruction the Court gave regarding the FLSA’s 2-3 statute of limitations. Specifically, the Plaintiffs asserted that the Court erred in giving an instruction framing the applicable limitations period, because Defendants had failed to specifically plead statute of limitations as an affirmative defense. However, construing Defendants’ pleadings in the case, as described below, to have pled such an affirmative defense, the Court affirmed the lower Court’s jury verdict, based on the instruction at issue.
The Eleventh Circuit explained:
“The district court instructed the jury as follows:
The Plaintiff is entitled to recover lost wages from the present time back to no more than two years before this lawsuit was filed on June 18, 2008, unless you find the employer either knew, or showed reckless disregard for the matter of whether its conduct was prohibited by the FLSA. If you find that the employer knew, or showed reckless disregard for the matter of whether its conduct was prohibited by the FLSA, the Plaintiff is entitled to recover lost wages from the present time back to no more than three years before this lawsuit was filed.
The jury answered “no” to the first question on the verdict form, concerning whether Appellees failed to pay Navarro overtime wages as required by law. Thereafter, Navarro filed this appeal.
On appeal, Navarro urges that the district court’s application of § 255(a)‘s limitation was improper because Appellees had waived the limitation by failing to properly plead it in their Answer. Appellees, on the other hand, urge that § 255(a) is not a traditional statute of limitations that must be raised as an affirmative defense. In the alternative, they claim that they adequately raised the limitation in their Answer and in the pretrial stipulations submitted to the district court.
The Court reviews a district court’s instructions to the jury for abuse of discretion. U.S. v. Lopez, 590 F.3d 1238, 1247-48 (11th Cir.2009). The Court reviews de novo a district court’s grant of a F.R.Civ.P. 50 motion for judgment as a matter of law. D’Angelo v. Sch. Bd., 497 F.3d 1203, 1208 (11th Cir.2007).
This Court has held that the § 255(a) statute of limitations is “an affirmative defense which must be specifically pled.” Day v. Liberty Nat’l Life Ins. Co., 122 F.3d 1012, 1015 (11th Cir.1997) (citing F.R.Civ.P. 8(c)). In Day, the Court ruled that the defendant had waived the § 255(a) statute of limitations by failing to assert it until after the jury had rendered a verdict. As a result, the Court reversed the district court’s grant of a judgment notwithstanding the verdict based on the statute of limitations defense. Id. at 1015-16 The Day Court emphasized the fact that the defendant’s failure to raise the defense until after the jury rendered a verdict deprived the plaintiff of the opportunity to contest the application of the limitation. Id. at 1015 (“[I]f [the defendant] had brought the limitations issue to the court during the … trial, [the plaintiff] could have offered evidence that the statute was tolled during some period of time, or have insisted that the jury instructions reflect the effect of the statute of limitations on any possible recovery by him.”). In finding a waiver, the Day Court relied on the Fifth Circuit’s earlier opinion in Pearce v. Wichita County, 590 F.2d 128, 134 (5th Cir.1979). The Pearce Court had addressed a situation almost identical to that in the Day case. In Pearce, the defendant had not raised the statute of limitations defense in its pleadings or in objection to the court’s jury instructions. Id. It had waited until after the jury verdict, finally bringing the limitations issue to the Court’s attention in a motion for judgment notwithstanding the verdict. Id. The Pearce Court held that such a delay constituted waiver of any objection to the limitations period that was applied. Id.
The case at hand is clearly distinguishable from the Day and Pearce cases, however, as Appellees raised § 255(a) several times before the case was submitted to the jury. First, Appellees stated in their Answer (under the heading “Affirmative Defenses”) that “[a]ny violation of the [FLSA] by Defendants was not willful, and was wholly unintentional. Defendants continuously acted in good faith with regard to the administration of its [sic] pay plan.” Next, more than a month before trial, the two-or-three-year limitation was referenced more than once in the parties’ Joint Pretrial Stipulation. Specifically, under the heading “Defendants’ Statement of the Case,” Appellees stated that “Defendants dispute … that Plaintiff was not paid for any overtime he may have worked during the last two or three years of his employment.” Also, in the Stipulation, the parties stated that the following fact was agreed upon and would not require proof at trial: “The corporate Defendant grossed in excess of $500,000.00 per year during the last three years of Plaintiff’s employment.” Finally, the parties and the court addressed this matter during trial, when, following the close of Navarro’s case, the Appellees based several motions for directed verdict on the three-year maximum limitations period. Navarro’s counsel, armed with case law, responded with the contention that the Appellees had not pled § 255(a) as an affirmative defense. The Court reviewed the proffered case, but ultimately ruled that § 255(a) would apply so that, at most, Navarro would recover for a three-year time period. Thus, this case stands in stark contrast to the Day and Pearce cases, where defendants had waived the defense by not raising it until after the jury had rendered a verdict.
The Court finds that Appellees timely raised the § 255(a) statute of limitations. Even if Appellees’ assertions in their Answer did not comply with a strict reading of F.R.Civ.P. 8(c), under this Court’s precedent, the limitation was still not waived. That is, although Rule 8(c) requires that a statute of limitations defense be raised as an affirmative defense, this Court has noted that “the purpose of Rule 8(c) is to give the opposing party notice of the affirmative defense and a chance to rebut it,” and, as a result, “if a plaintiff receives notice of an affirmative defense by some means other than the pleadings, ‘the defendant’s failure to comply with Rule 8(c) does not cause the plaintiff any prejudice.’ “ Grant v. Preferred Research, Inc., 885 F.2d 795, 797 (11th Cir.1989) (quoting Hassan v. U.S. Postal Serv., 842 F.2d 260, 263 (11th Cir.1988)). In Grant, the defendant raised the statute of limitations defense for the first time in a motion for summary judgment filed approximately one month before trial. Id. This court ruled that, because the plaintiff was “fully aware” that the defendant intended to rely on the defense, and because the plaintiff did not assert any prejudice from the lateness of the pleading, the defendant’s failure to comply with Rule 8(c) did not result in a waiver. Id. at 797-98.
As demonstrated above, in this case, Navarro was given ample notice of Appellees’ intent to rely on § 255(a) in several instances prior to trial. Moreover, when the issue was debated in light of the Appellees’ directed verdict motions, Navarro’s counsel made a thorough argument (including case citations) against the statute’s application. He never claimed during that argument that he had been surprised or somehow otherwise prejudiced by defense counsel’s reliance upon § 255(a) at trial. As a result, the district court did not err in limiting the jury’s consideration of unpaid overtime to the two-or three-year period prior to the filing of the complaint. Further, because it was uncontested that there was no evidence that Domingo or Rosa Santos exercised any active supervisory control over the company for the period three years prior to the filing of the complaint, the district court did not err in granting Appellees’ motion for judgment as a matter of law on the issue of the individual liability of either of them. Accordingly, we affirm the judgment entered on the jury’s verdict.”
N.D.Ga.: “Yard Hostler” Not Exempt Under The Motor Carrier Act; Defendant Failed To Show That He “Affected The Safety Or Operation Of Motor Vehicles In Transporting Property In Interstate Or Foreign Commerce On The Public Highways”
Billingslea v. Southern Freight, Inc.
The case was before the Court on Defendant’s motion for summary judgment. Defendants’ sought summary judgment finding that Plaintiff, a “yard hostler,” was exempt from the overtime provisions of the FLSA. Although it was not disputed that Defendant was/is a Motor Carrier, subject to the MCA, the Court determined that Defendant had failed to demonstrate that Plaintiff was individually exempt, because there was no showing that as a “yard hostler” he “affected the safety of operation of motor vehicles in transporting property in interstate or foreign commerce on the public highways.” Therefore, Defendant’s motion was denied.
The Court highlighted the following applicable facts:
“Defendant employed Plaintiff as a “yard hostler” at the Nestle distribution facility from August 2008 until November 2008, when he voluntarily resigned [Doc. 22-2, ¶ 20]. Prior to his employment, Defendant required Plaintiff to undergo a drug test and satisfy various physical requirements, consistent with standards set by the Department of Transportation [Doc. 22-2, ¶ 9]. Plaintiff satisfactorily completed the drug test and met the physical requirements [Doc. 22-2, ¶ 10]. Also, prior to his employment, Plaintiff was trained in relevant safety procedures and protocols for his position and acknowledged in writing that he received training on those procedures [Doc. 22-2, ¶ 11].
As a yard hostler at the Nestle distribution facility, Plaintiff drove a “hostler tractor,” which he connected to freight trailers in order to transport the trailers from a staging area to loading docks at the facility [Doc. 22-2, ¶ 12]. Once Plaintiff moved a given trailer to the distribution facility loading dock, the freight in that trailer would be unloaded into the facility; afterwards, Plaintiff would use a hostler tractor to return emptied trailers to the staging area [Doc. 22-2, ¶ 13]. Nothing in the record indicates that Plaintiff ever drove a hostler tractor or any trucks on a public roadway or interstate highway, or that Defendant ever assigned Plaintiff the duty of driving any vehicles on a public roadway or interstate highway. Instead, the record indicates that Plaintiff performed all of his duties as a yard hostler on private property at the distribution facility.
In addition to his core duties, Plaintiff performed various additional tasks designed to promote safety at the distribution facility. At the start of each of his shifts, Plaintiff inspected his assigned hostler tractor for any noticeable maintenance or damage issues [Doc. 22-2, ¶ 14]. If any such issues existed, he reported them to an on-site administrator and made a written report detailing the issues [Doc. 22-2, ¶ 14].
Plaintiff also inspected trucks, trailers, and freight that arrived at the distribution facility. When Plaintiff received refrigerated trucks that he was assigned to transfer, he ensured that the fuel and temperature levels of the truck remained satisfactory during the transfer [Doc. 22-2, ¶ 15]. When Plaintiff received a sealed freight trailer, he often used a bolt cutter to break the trailer’s seal and opened one of the trailer’s back doors before backing the trailer onto the loading dock [Doc. 22-2, ¶ 16]. After opening the back door of a given trailer, Plaintiff would assess whether the freight inside the trailer had shifted during transport or posed any danger to unloaders [Doc. 22-2, ¶ 16]. Plaintiff also inspected trailers that he transported for any noticeable damage, such as broken taillights or flat tires [Doc. 22-2, ¶ 19]. Plaintiff reported such damage to the administrative office and would then move the trailer to the maintenance area of the distribution facility yard [Doc. 22-2, ¶ 19].
When other yard hostlers backed trailers up to the distribution facility’s loading dock, Plaintiff helped “spot” those trailers [Doc. 22-2, ¶ 17]. When Plaintiff backed trailers up to the loading dock, he often chocked the trailer tires to ensure that the trailer did not slide or roll unintentionally after being parked at the loading dock [Doc. 22-2, ¶ 18].
Defendant compensated Plaintiff on an hourly basis and internally classified him as exempt from the overtime compensation requirements of the FLSA, based on its interpretation of an exemption provision in the MCA [Doc. 22-2, ¶ 23].
Defendant and SFI clearly fall into the class of employers whose motor-vehicle transportation the Secretary of Transportation could, and did, regulate. In viewing the evidence in the light most favorable to Plaintiff, however, the Court concludes that Defendant has not borne its burden of showing that Plaintiff, through the actual work that he performed as a yard hostler, “plainly and unmistakably” fell within the terms of the motor carrier exemption to the overtime compensation requirement found in the FLSA. Hodgson, 472 F.2d at 47.”
After discussing the application of the MCA to drivers, driver’s helpers, loaders and/or mechanics, the Court held that Defendant had failed to show Plaintiff, a “yard hostler,” was individually covered by the MCA, because Defendant’s had failed to show that his work affected the safety of operations of motor vehicles in transporting property in interstate or foreign commerce on the public highways. In doing so, the Court drew a clear line between simply safety involved internally at Defendant’s facility, and the safety involved in operating the vehicles outside, on public roadways, in interstate commerce.
“Defendant emphasizes the numerous safety-related activities that Plaintiff undisputedly undertook as a yard hostler and stresses the effect that those activities arguably had on the safe operation of trucks and trailers used to transport property through interstate commerce. But the second prong of the motor carrier exemption test contains two wholly independent parts. To bear its burden of showing that Plaintiff fell within the motor carrier exemption, Defendant was required to show that Plaintiff performed the work of either a driver, driver’s helper, loader, or mechanic, and that such work directly affected the safety of operation of motor vehicles in transporting property in interstate or foreign commerce on the public highways. Though the record reflects that some of Plaintiff’s activities as a yard hostler promoted the safe operation of trucks and trailers transporting property through interstate commerce, nothing in the record indicates that those activities were those of a driver, driver’s helper, loader, or mechanic as defined by the FLSA regulations. Without more, the Court finds summary judgment in Defendant’s favor on the basis of the motor carrier exemption inappropriate.”
Growth of Unpaid Internships May Be Illegal, New York Times Reports
Today’s NY Times reports that there is a growing trend of employers, who illegally deem workers, entitled to be paid at least minimum wage, to be unpaid “interns.”
The article reports that, “[w]ith job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor.
Convinced that many unpaid internships violate minimum wage laws, officials in Oregon, California and other states have begun investigations and fined employers. Last year, M. Patricia Smith, then New York’s labor commissioner, ordered investigations into several firms’ internships. Now, as the federal Labor Department’s top law enforcement official, she and the wage and hour division are stepping up enforcement nationwide.
Many regulators say that violations are widespread, but that it is unusually hard to mount a major enforcement effort because interns are often afraid to file complaints. Many fear they will become known as troublemakers in their chosen field, endangering their chances with a potential future employer.”
To read the entire article, click here.
M.D.Fla.: Compensatory Damages Available To Plaintiff In FLSA Retaliation Claim
Vaccaro v. Custom Sounds, Inc.
This case was before the Court, following Defendant’s default. The Court set the matter for an evidentiary hearing on the issue of damages to be awarded in the final default judgment. Of significance the Court ruled that an employee terminated in retaliation for engaging in FLSA protected activity may recover non-economic or compensatory damages.
Discussing the issue of compensatory damages the Court stated:
“In addition to lost wages as a result of retaliation, Plaintiff seeks compensatory damages in the amount of $10,000.00 for emotional distress associated with the retaliation. See Total Damages Calculation. The damages provision for retaliation claims does not speak directly to compensatory damages for emotional distress, but states that the employer “shall be liable for such legal or equitable relief as may be appropriate to effectuate the purposes of [the anti-retaliation provision] …” 29 U.S.C. § 216(b).
At least two judges in the Middle District of Florida have come to apparently opposite conclusions regarding whether compensatory damages for emotional distress are available pursuant to section 216(b). The Court in Bolick v. Brevard County Sheriff’s Dept. held that “[p]unitive and emotional damages are not available under the FLSA” and granted partial summary judgment to a defendant on the issues of punitive and emotional damages. 937 F.Supp. 1560, 1566-67 (M.D.Fla.1996). Since then, in Bogacki, the Court was faced with the issue of whether the retaliation provision of the FLSA provides for compensatory damages as a result of emotional distress. 370 F.Supp.2d at 1201-02. The Bogacki Court referenced the Sixth Circuit’s recognition in Moore v. Freeman, 355 F.3d 558, 564 (6th Cir.2004) that the Seventh Circuit, the Eighth Circuit, and the Ninth Circuit “directly or indirectly have allowed emotional distress awards under the FLSA to stand.” Bogacki, 370 F.Supp.2d at 1203 (internal citations omitted). Ultimately, the Bogacki Court determined that “each [retaliation] case should stand or fall on its own merit” and denied without prejudice a defendant’s motion for summary judgment on mental anguish damages because “neither party ha[d] addressed the strength, weakness, or absence of any evidence of the Plaintiff’s alleged emotional distress …” Id. at 1205-06.
Here, the Court has previously found that Defendants admitted, by defaulting, that “Plaintiff suffered emotional distress as a result of his termination.” Order (Doc. No. 19) at 2. Notwithstanding this factual finding, the Court recognized that “allegations relating to the amount and character of damages are not admitted by virtue of default. Rather, the Court determines the amount and character of damages to be awarded.” Id. at 3 (internal citation omitted). In assessing the issue of damages available for a retaliation claim, it is not entirely clear whether the Eleventh Circuit would approve awarding compensatory damages for emotional distress; however, the Court’s analysis in Bogacki, combined with other circuits’ approval of such damages and the Eleventh Circuit’s handling of the issues presented in Olivas, leads the undersigned to believe that the Eleventh Circuit would conclude that compensatory damages for emotional distress can be awarded in FLSA cases.
Plaintiff testified his employer fired him as a result of his inquiry regarding unpaid overtime. When Plaintiff attempted to pick up his last paycheck, Plaintiff was told to “take it out of [his employer’s] a* *.” No other egregious actions were undertaken or words spoken by the employer.
During his unemployment, Plaintiff was engaged to be married, had a two-year-old daughter, and had to rely on his parents to support his family. Plaintiff stayed with his soonto-be father-in-law. Plaintiff’s “mother” helped him pay for necessaries, his cellular phone bill, and insurance. According to Plaintiff, these stressful events caused him to be upset and embarrassed. The events “took a toll” on his relationship with his fiancé. The undersigned credits Plaintiff’s testimony in this regard. However, considering Plaintiff’s testimony in the framework of other cases in which courts have considered appropriate amount of damages for emotional distress claims, the undersigned finds as a factual matter that based upon the harm suffered by Plaintiff, $5,000.00 is a fair and reasonable amount. See Perez v. Jasper Trading, Inc., No. 05 CV 1725(ILG)(VVP), 2007 WL 4441062, at *8 (E.D.N.Y. Dec. 17, 2007) (unpublished) (recognizing emotional distress awards involving facts similar to those in that case “usually range from $5,000 to $30,000”) (internal citations omitted). Although it is undeniable that Plaintiff suffered some form of emotional distress (and indeed the Court has already so found), the facts of this relatively unremarkable FLSA case do not warrant an award of $10,000.00 for such distress. Accordingly, the undersigned recommends awarding $5,000.00 in compensatory damages for emotional distress.”
S.D.N.Y.: Plaintiff Not Exempt Under “Air Carrier” Exemption To FLSA, Because Employer Failed To Show It Was “Directly Or Indirectly Owned Or Controlled By… A Carrier Or Carriers,” As Required For RLA Coverage
Cunningham v. Electronic Data Systems Corp.
This case was before the Court on Defendant, Electronic Data System’s (“EDS”) second Motion for Summary Judgment, seeking a finding that Plaintiff was exempt from the FLSA under the so-called “Air Carrier” Exemption. After a lengthy discussion of the history and application of the “Air Carrier” Exemption, which exempts any employee of a company covered by the Railway Labor Act (“RLA”) from FLSA coverage, the Court found the exemption inapplicable to the Plaintiff, because Defendant failed to prove that it was “directly or indirectly owned or controlled by, or under common control with, a carrier or carriers.”
Reaching its decision, the Court reasoned:
“The RLA defines the scope of its coverage of carrier affiliates with the following language:
The term ‘carrier’ includes … any company which is directly or indirectly owned or controlled by or under common control with any carrier by railroad [or air] and which operates any equipment or facilities or performs any service (other than trucking service) in connection with the transportation, receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, and handling of property transported by railroad [or air].
The National Mediation Board (“NMB”), the agency charged with administering the RLA, formulates this statutory language into the following test:
When an employer is not a rail or air carrier in the transportation of freight or passengers, the NMB applies a two-part test in determining whether the employer and its employees are subject to the RLA. First, the NMB determines whether the nature of the work is that traditionally performed by employees of rail or air carriers-the function test. Second, the NMB determines whether the employer is directly or indirectly owned or controlled by, or under common control with, a carrier or carriers-the control test. Both parts of the test must be satisfied for the NMB to assert jurisdiction.
In re Int’l Cargo, 31 NMB at 406 (citations omitted). This test is now well-established in the agency’s case law and, as the Court noted in its prior opinion, courts defer to it as the proper construction of the statute. Cunningham, 579 F.Supp.2d at 542;District 6, 139 F.Supp.2d at 561.
Though the NMB’s interpretation of the RLA governs this case, the FLSA context remains relevant in one crucial sense. It is well-settled that “exemptions to the FLSA are narrowly construed against [ ] employers.” Bilyou v. Dutchess Beer Distribs., Inc., 300 F.3d 217, 222 (2d Cir.2002) (internal quotations omitted). As a matter of substantive law, it is not apparent how that doctrine should fit into the Court’s analysis, because by the statute’s plain language the FLSA’s air carrier exemption and the RLA are coextensive. 29 U.S.C. § 213(b)(3). It would be strange to apply the RLA’s definition of “carrier” differently in FLSA cases than in RLA cases, and other courts have not done so. See Verrett, 70 F.Supp.2d at 1281-83;Slavens v. Scenic Aviation, Inc., 221 F.3d 1353, at *1 (10th Cir.2000). However, though the FLSA context would not seem to alter the substance of applicable RLA law, the narrow standard of construction for FLSA exemptions does have an important procedural impact-it charges the employer with the burden of proving that an exemption applies. Cunningham, 579 F.Supp.2d at 540;Martin v. Malcolm Pirnie, Inc., 949 F.2d 611, 614 (2d Cir.1991) (“[A]n employer bears the burden of proving that its employees fall within an exempted category of the [FLSA].”). Thus, summary judgment is only appropriate here if EDS has submitted enough undisputed evidence to prove that it meets both the “function” and “control” prongs of the NMB’s carrier-affiliate test. See Martin, 949 F.2d at 616. EDS has met this burden with respect to the function prong but not with respect to the control prong.
EDS plainly satisfies the function prong. The controlling inquiry is “whether the nature of the work is that traditionally performed by employees of rail or air carriers.” In re Int’l Cargo, 31 NMB at 406. As the agency applies the test, any work that proximately advances the carrier’s commercial transportation services, even if that work is not inherently aviation-related, satisfies the standard. Thus, employers that provide sky-cap, janitorial, shuttle-bus, and cargo-handling services have all been found to satisfy the function prong. Id. at 406 (cargo-handling); In re Kanonn, 31 NMB 409, 417 (June 18, 2004) (janitorial and sky-cap services); In re Air Serv Corp., 35 NMB at 210 (shuttle-bus). The focus of the test is whether the carrier affiliate’s services are sufficiently connected to the carrier’s commercial transportation operations that a work stoppage at the carrier affiliate would impede those operations. See Verrett, 70 F.Supp.2d at 1281 (finding that employer that provided IT services to American Airlines met the function prong) (“When the activities of carrier affiliates are necessary to the operations of an air carrier, and a labor dispute at the affiliate could cripple airline operations, those affiliates must be subject to the RLA because such disruption is the very type of interruption to air commerce the RLA was designed to prevent.”); In re Milepost Indus ., 27 NMB 362, 366 (May 9, 2000) (function prong satisfied where employer’s work was “an integral part of the carrier’s business.”).
Like the employer in Verrett, which also provided IT services to American, EDS provides American with services that are crucial to the airline’s commercial operations. (Shanks Decl. ¶ 3.) In fact, EDS’s services to American are more or less the same as the services found to pass the “function” prong in Verrett: EDS acquired SABRE, the IT company at issue in Verrett, soon after that case was decided, and EDS continued thereafter to offer the airline the “same scope of IT services” that SABRE provided before the acquisition. (Arnold Decl. ¶ 4-5.) The Court agrees with Verrett ‘s reasoning that because EDS’s services, like the services SABRE provided previously, are “absolutely integral” to American’s operations, those services pass the function prong. Verrett, 70 F.Supp.2d at 1283. This conclusion finds further support in the agency opinions holding that services of more peripheral significance to air transport operations pass the function test. See, e.g., In re Dobbs Int’l Services, 34 NMB 97, at *7 (March 2, 2007) (in-flight catering); In re John Menzies, 31 NMB 490, 504 (Aug. 26, 2004) (cabin-cleaning).
The control prong requires more analysis. The relevant inquiry is whether “the employer is directly or indirectly owned or controlled by, or under common control with, a carrier or carriers.” In re Int’l Cargo, 31 NMB at 406. EDS does not claim to be owned by or under common ownership with a carrier, so it can only satisfy this prong of the test by showing that it is “controlled by” American. The Court summarized the NMB’s framework for applying this statutory language in its opinion denying defendant’s first summary judgment motion:
[I]n determining whether an entity is controlled by an air carrier, the NMB considers factors including “the extent of the carrier control over the manner in which the company conducts its business; access to the company’s operations and records; the carrier’s role in personnel decisions; the carrier’s degree of supervision over the company’s employees; the carrier’s control over employee training; [and] whether company employees are held out to the public as employees of the carrier,” John Menzies, 31 N.M.B. at 504-05, “the carrier’s role in the entity’s daily operations,” “the entity’s employees’ performance of services for the carriers,” and “the degree to which the carriers affect other conditions of employment,” Int’l Total Servs., 26 N.M.B. 72, 75.
Cunningham, 579 F.Supp.2d at 542 (alterations omitted). Not addressed in this summary is the threshold issue of whether the NMB’s control analysis should apply to EDS as a single corporate entity or instead to a discrete area of EDS’s operations relating to air travel. The Court considers this question, which has received surprisingly little direct attention from the NMB, infra at pages 14-16.
The NMB’s long list of control factors, though now an established feature of the agency’s precedent, does not provide precise guidance on questions of carrier control. Rather, with so many considerations in play, the line between “control” and “lack of control” blurs. The agency has determined, for example, that a sky-cap, baggage handling, cabin cleaning, and food services contractor, which gave air carriers substantial control over its personnel decisions and allowed the carriers to train its employees directly on a range of procedures, was not “controlled by” its air carrier clients. In re Ogden Aviation Serv., 23 NMB 98 (Feb. 5, 1996). On the other hand, the NMB also held that a contractor providing janitorial and sky-cap services, which accepted only limited input from the carrier as to personnel matters, but whose employees worked under close air carrier supervision, and which received its equipment and office space from the air carriers, was “controlled by” the air carriers. In re Kanonn Serv. Enter. Corp., 31 NMB 409 (June 18, 2004). Though some distinctions do exist between the cases-in Kanonn, the carriers provided equipment and office space and supervised affiliate employees more closely-it is difficult to draw a principled line between the outcomes, particularly under the NMB’s amorphous list of factors. See Ogden, 23 NMB at 107; Kanonn, 31 NMB at 417; compare also In re Huntleigh USA Corp., 29 NMB 121 (Dec. 17, 2001) (sky-cap and baggage handling contractor “controlled by” carrier).
Assessing the relative weight the NMB places on each factor brings the test into sharper focus. The factors certainly vary in importance. One in particular-the extent of the carrier’s role in the subject company’s daily operations-appears to determine the outcome in many cases. Where the carrier controls the details of the day-to-day process by which the contractor provides its services-for example, the number of employees assigned to particular tasks, the employees’ attire, the length of their shifts, and the methods they use in their work-the control prong is likely satisfied. On certain occasions, the NMB has acknowledged that this factor bears heightened significance. Ogden, 23 NMB at 104 (“[The Board] focuses on the carriers’ role in the entity’s daily operations and its effect on the manner in which employees perform their jobs.”); Int’l Total Servs., 26 N.M.B. at 75 (emphasizing the “carriers’ role in the entity’s daily operations”). Further, in every case the parties cite holding that a carrier affiliate satisfied the control prong, the air carrier exerted substantial control, on a day-to-day basis, over how affiliate employees did their jobs. See Kanonn, 31 NMB at 417 (“Delta determines how many employees work each shift and at what locations. Delta also must authorize the use of overtime and dictate the maximum hours Kanonn employees can work each month. While Delta does not directly supervise Kanonn employees, Delta managers meet with [a Kanonn supervisor] on a daily basis to review Kanonn employee performance.”).The day-to-day operational control factor is not independently dispositive; in some of the cases finding a lack of requisite control, carriers oversaw aspects of the contractor’s daily operations. See, e.g., In re Signature Flight Support, 32 NMB 214, 220 (Aug. 31, 2005) (carrier imposed “stringent demands” on employer’s fueling and towing procedures and met with employer throughout the day to discuss scheduling needs and discuss employee performance). But there is little doubt that the agency places more weight on this factor than the others on its list (such as “records access” and whether the subject employees are “held out to the public” as the carrier’s own), and it seems that, where the carrier’s control over daily operations is particularly extensive, the control prong will always be satisfied. See In re Int’l Cargo, 31 NMB 396 (cargo services employer “controlled by” carrier where carrier dictated storage and handling techniques, set requirements for performance of administrative functions, required that the contractor use a specific computer system, and determined the priority of assignments).
The carrier’s power over the subject employer’s personnel decisions is another consideration of heightened import. Cases finding a lack of requisite control usually emphasize that the carrier affiliate “hires, trains, pays, promotes, transfers, evaluates, disciplines, and if necessary, discharges” its own employees. See Ogden Aviation, 23 NMB at 106. On the other hand, carrier authority over hiring decisions and employee termination is a solid indication that the carrier “controls” the employer. Huntleigh, 29 NMB at 126 (“Southwest is entitled to request the removal of any Huntleigh employee that Southwest believes displays improper conduct.”); In re AirServ Corp., 35 NMB at 211 (“FedEx has final authority to approve or reject a[job] applicant…. [Air Serv] has [ ] never refused a request by FedEx to discipline or terminate an employee.”). This factor is not a perfect bellwether either-in Kanonn, the carrier was not heavily involved in personnel matters-but a carrier’s right to terminate employees or reverse hiring decisions seems to argue strongly for satisfaction of the control prong. See id.
Thus, though all of the NMB’s factors remain relevant to the analysis, day-to-day operational control and influence over personnel decisions do much to determine outcomes under the control prong.
The Court now turns to application of the control factors to this case. As a threshold matter, the parties disagree over the proper scope of that application. Plaintiffs argue that the control prong should apply to EDS generally, as a multi-national IT services provider with clients in a wide array of industries. Under that framework, there is little doubt that American does not “control” EDS, because EDS provides services to hundreds of non-carrier clients. Defendants, on the other hand, argue that the test should apply “solely to that portion of an employer’s business that relates to an air carrier.” (Def. Mem. at 19.) Under that view, EDS’s satisfaction of the prong would turn on whether American controls the manner in which EDS provides services to American, specifically, regardless of the extent of EDS’s non-carrier operations.
Defendants have the better argument. NMB precedent demonstrates that the agency limits application of its control-prong factors to, at the very least, the segment of an employer’s operations that relate to the carrier or carriers in question. In Argenbright Security, 29 NMB 332 (June 13, 2002), the carrier affiliate provided “security and ancillary services” through two distinct operating divisions-one that served airlines exclusively, and another that served only non-carriers. The particular set of carrier-affiliate employees at issue in the case-sky-cap workers whose union sought a ruling that the NLRA governed disputes between it and the carrier-affiliate-worked for Continental airlines at Newark airport. In finding the control prong satisfied, the NMB considered only the employer’s relationship with Continental at Newark, not its relationship with other carriers, and not its non-carrier business. Id. at 338-39. Other agency decisions show a similarly limited control analysis. See, e.g., Milepost Indus., 27 NMB at 366-67 (narrowing control analysis to relationship between employer and particular carriers served by employees involved in representation dispute). The rule from these cases-that the control analysis should consider the specific relationship between an employer and a commercial air carrier that a particular dispute implicates-stands on solid ground. If the test applied to employers like EDS as a whole, entire units of workers providing carrier-support services would not be subject to the RLA, regardless of the integrality of their work to air transportation, simply because they fall under the umbrella of large corporations with additional divisions serving other industries. Such a result would not advance the statute’s purpose of protecting the continuity of commercial air transportation. See Verrett, 70 F.Supp.2d at 1283 (“The fact that a company provides services to carriers and to some non-carriers does not detract from RLA jurisdiction, as long as there is still an essential element of transportation-related service.”). Thus, EDS meets the control test if its relationship with American-the client for whom the Cunninghams worked-evinces the requisite control.
A further issue, which the parties have not addressed, is whether the control test may apply to an even narrower segment of the employer’s operations-defined either geographically or functionally-than its relationship with a specific carrier client. The NMB is apparently willing to focus the control analysis upon a specific geographical unit of a carrier affiliate’s operations. In re Huntleigh USA Corp., 29 NMB 121 (Dec. 17, 2001) (limiting analysis to operations at one airport). If the same scope limitation were appropriate for a particular category of employees working for a particular client, then EDS might satisfy the control prong simply by showing that Staff Augs at American-as a distinct unit of employees-are “controlled by” American. This framework would require applying the “craft or class” test used to define bargaining units under the RLA to determinations of whether specific subsets of carrier-affiliate employees fall under NMB or NLRB jurisdiction. See, e.g., In re Merger of Grand Trunk Western Railroad Co., 17 NMB 282, 288 (June 18, 1990). The NMB’s carrier-affiliate case law, however, does not appear to address the issue. Because the parties have not briefed the question, and because the current record does not permit a determination as to whether Staff Augs constitute a “craft or class,” the Court declines to consider the issue now, though trial of this action may well bring it to the fore.
While EDS’s formulation of the control prong (that it requires analysis only of the IT services EDS provides to American) is correct, at least as far as it goes, defendant has not met its burden of proving that the prong is satisfied. To establish that its relevant operations are “controlled by” American, EDS relies mainly upon its contract with the airline. Admittedly, portions of the contract do support defendant’s case, at least to some extent. For example, the Agreement requires that EDS house three American software applications on its computers, (Agrmnt. at 35); and obtain American’s approval before using any third-party software. (Id. at 31-32). The Agreement also affords American the right to reject any particular software update EDS wishes to implement, (Id. at 15), and sets conditions under which EDS may use American office space. (Id. at 32-33.) Further, the subsidiary “service level” agreements impose performance standards on EDS, covering such issues as “average response time to outages” and “the number of outages per month on network resources.” (Shanks Decl. ¶¶ 7 .) These contractual provisions sketch the parameters of a relationship that might approach the level of control present in the cases defendant cites, see supra n. 4 (collecting cases), but nothing in the record informs the Court as to the actual nature of American’s relationship with EDS, or the actual level of control that one entity exerts over the other. Do all EDS employees in fact work from American office space? Does American actually exercise tight oversight of the software EDS uses? The record does not provide any answers. In the same vein, does American actually monitor and enforce the service levels in a way that approximates the level of daily supervision seen in the NMB cases? See, e.g., Kanonn, 31 NMB at 417; In re Air Serv, 35 NMB at 211. The little evidence defendant has submitted on this question suggests that American, though it can access compliance data on an EDS website, in fact monitors compliance only “periodically,” mainly through monthly and quarterly reports from EDS. (Shanks Decl. ¶¶ 6-11.) That comparatively sparse level of operational supervision argues against satisfaction of the control prong. See Kanonn, 31 NMB at 417.
Indeed, the most obvious gap in the evidence concerns the two most significant NMB factors: American’s day-to-day involvement in EDS’s operations, and its influence over EDS’s personnel decisions. The record does not indicate where core IT employees assigned to the American account work, let alone whether American controls their schedules, work procedures, attire, or anything else about their workday. And while the contract provides American with some power over whom EDS hires to fill the roles of account manager and five other “key” positions, nothing in the record indicates whether American actually exerts any such influence. Moreover, the NMB has found that control over only top managers does not necessarily demonstrate sufficient power over personnel decisions to satisfy the control prong. In re Bombardier, 32 NMB 131, 139-40 (Jan. 31, 2005) (lack of requisite control even where carrier retained “right to approve [employer’s] selection of the General Manager ….”). The record is silent as to whether American controls personnel decisions regarding other core IT workers, beyond the small group mentioned in the Agreement.
Aside from the contractual provisions, most of the remainder of EDS’s control evidence pertains exclusively to Staff Augs. According to the record, Staff Augs work from American office space, among American employees, and under the supervision of American managers, who control Staff Aug assignments, work schedules, and dress code. (Def. 56.1 ¶¶ 95-96, 105; Cuccrese Decl. ¶¶ 7-15.) American establishes Staff Aug hiring criteria, interviews candidates, and makes final hiring decisions. (Def. 56.1 ¶ 93.) When American is dissatisfied with a Staff Aug’s performance, it can demand that EDS discipline or remove the individual, and EDS habitually complies with those demands. (Id. at ¶¶ 109-11.) This evidence certainly shows that Staff Augs like the Cunninghams are “controlled by” American, but it only works to emphasize the inadequacy of the record as a whole, under the interpretation of the control prong EDS has proposed. American certainly controls personnel decisions regarding Staff Augs, but nothing shows similar control over EDS’s other IT workers-the employees who provide American with “midrange hosting (i.e., servers), mainframe hosting, network, applications development and maintenance, helpdesk and desktop [services].” (Id. at 9.) Similarly, with respect to operational control, it is evident that American supervises Staff Augs on a daily basis, but the record does not indicate whether American controls any details of daily operations for core IT workers. EDS has submitted ample declarations about Staff Aug life, but no evidence addresses the circumstances in which core IT employees work. And the record does not say what portion of the EDS-American relationship Staff Augs represent. For all the Court knows, Staff Augs are a minor aspect of the relationship. Thus, under EDS’s own formulation of the control prong-that it implicates the “portion of [EDS’s] business that relates to [American]”-the Staff Aug evidence does not satisfy EDS’s burden to prove that it is “controlled by” American. Rather, that evidence highlights the insufficiency of the record concerning American’s overall relationship with EDS.
Because EDS has not met its burden with respect to the control prong, summary judgment is denied. See Cunningham, 579 F.Supp.2d at 540.”
Health Care Reform Law Amends FLSA to Require Breastfeeding Breaks, Thompson Reports
Under the new Health Care Reform Law, the FLSA has been amended in several important respects. In addition to the highly publicized provision of healthcare for previously uninsured people, Thompson reports that employers must now provide breaks for women who are breastfeeding:
“Employers must now provide “reasonable” unpaid breaks to nursing mothers to express milk for their infants under an amendment to the Fair Labor Standards Act included in the landmark health care law signed by President Obama on March 23.
The health care law adds a new provision to the FLSA, 29 U.S.C. §207(r)(1), which allows nursing mothers to take a break every time they need to express breast milk and requires employers to provide a private location, other than a bathroom, where such employees may express milk. Employees must be allowed such breaks for up to one year after their child’s birth.
Employers of fewer than 50 employees are exempt if the breastfeeding requirements would “impose an undue hardship by causing the employer significant difficulty or expense.”
A number of states already mandate breastfeeding breaks, and under the FLSA, employers must comply with the standard that is more favorable to the employee (29 U.S.C. §218).
The health care law also amends the FLSA to require employers of more than 200 employees to automatically enroll new employees in existing employer-offered health plans.”
To read the entire article click here.
9th Cir.: Time Police Officers Spent Donning/Doffing Uniforms and Equipment Not Compensable, Because Officers Had The Option Of Donning/Doffing At Home
Bamonte v. City of Mesa
Appellants, police officers employed by Appellee City of Mesa (City), challenged the district court’s entry of summary judgment in favor of the City. The officers contended that the City violated the Fair Labor Standards Act (FLSA) by failing to compensate police officers for the donning and doffing of their uniforms and accompanying gear. Because officers had the option of donning and doffing their uniforms and gear at home, the district court determined that these activities were not compensable pursuant to the FLSA and the Portal-to-Portal Act. The Ninth Circuit affirmed, and held that these activities were not compensable pursuant to the FLSA.
To read the entire opinion click here.
Mortgage Loan Officers Do Not Typically Qualify For The Administrative Exemption, Says DOL
Administrator’s Interpretation No. 2010-1
The Wage and Hour Division, under the current Administration, has issued its first Administrative Interpretation Letter. The introductory text of the Letter is below:
“Based on the Wage and Hour Division’s significant enforcement experience in the application of the administrative exemption, a careful analysis of the applicable statutory and regulatory provisions and a thorough review of the case law that has continued to develop on the exemption, the Administrator is issuing this interpretation to provide needed guidance on this important and frequently litigated area of the law. Based on the following analysis it is the Administrator’s interpretation that employees who perform the typical job duties of a mortgage loan officer, as described below, do not qualify as bona fide administrative employees exempt under section 13(a)(1) of the Fair Labor Standards Act, 29 U.S.C. § 213(a)(1).
Typical Job Duties of Mortgage Loan Officers
The financial services industry assigns a variety of job titles to employees who perform the typical job duties of a mortgage loan officer. Those job titles include mortgage loan representative, mortgage loan consultant, and mortgage loan originator. For purposes of this interpretation the job title of mortgage loan officer will be used. However, as the regulations make clear, a job title does not determine whether an employee is exempt. The employee’s actual job duties and compensation determine whether the employee is exempt or nonexempt. 29 C.F.R. § 541.2.
Facts found during Wage and Hour Division investigations and the facts set out in the case law establish that the following are typical mortgage loan officer job duties: Mortgage loan officers receive internal leads and contact potential customers or receive contacts from customers generated by direct mail or other marketing activity. Mortgage loan officers collect required financial information from customers they contact or who contact them, including information about income, employment history, assets, investments, home ownership, debts, credit history, prior bankruptcies, judgments, and liens. They also run credit reports. Mortgage loan officers enter the collected financial information into a computer program that identifies which loan products may be offered to customers based on the financial information provided. They then assess the loan products identified and discuss with the customers the terms and conditions of particular loans, trying to match the customers’ needs with one of the company’s loan products. Mortgage loan officers also compile customer documents for forwarding to an underwriter or loan processor, and may finalize documents for closings. See, e.g., Yanni v. Red Brick Mortgage, 2008 WL 4619772, at *1 (S.D. Ohio 2008); Pontius v. Delta Financial Corp., 2007 WL 1496692, at *2 (W.D. Pa. 2007); Geer v. Challenge Financial Investors Corp., 2007 WL 2010957 (D. Kan. 2007), at *2; Chao v. First National Lending Corp., 516 F. Supp. 2d 895, 904 (N.D. Ohio 2006), aff’d, 249 Fed.App. 441 (6th Cir. 2007); Epps v. Oak Street Mortgage LLC, 2006 WL 1460273, at *4 (M.D. Fla. 2006); Rogers v. Savings First Mortgage, LLC, 362 F. Supp. 2d 624, 627 (D. Md. 2005); Casas v. Conseco Finance Corp., 2002 WL 507059, at *1 (D. Minn. 2002).”
To read the entire Letter click here.
1st Cir.: Municipality Need Not Give Notice To Its Public Safety Officers Before The Municipality Takes Advantage Of 29 U.S.C. § 207(k); Notice Not A Prerequisite To Application Of Public Safety Exemption
Calvao v. Town Of Framingham
Plaintiffs are police officers of the Town of Framingham who brought a putative class action suit against the Town in April 2005, alleging that the Town had failed to pay them sufficient overtime in violation of the FLSA, 29 U.S.C. §§ 201–19, and seeking damages. In anticipation of the Town’s defense, the officers sought a declaratory judgment that the Town was ineligible for the FLSA’s limited public safety exemption from overtime, 29 U.S.C. § 207(k), because the Town failed to adequately put them on notice of its intent to use 207(k), an exemption eases the FLSA’s overtime pay requirements on public employers who establish work schedules that meet statutory requirements. Affirming the decision of the Court below, the First Circuit held that a Town seeking to utilize 207(k) need not put its public safety employees on formal notice beforehand.
Initially, the Court discussed the legal background of the so-called “Public Safety Exemption” as follows:
“The history and scope of the FLSA public safety exemption set the background. “Congress enacted the FLSA in 1938 to establish nationwide minimum wage and maximum hours standards.” Moreau v. Klevenhagen, 508 U.S. 22, 25 (1993); Ellen C. Kearns et al., The Fair Labor Standards Act § 1.III, at 12-13 (1999). Later amendments in 1966 and 1974 extended the Act’s reach to state and municipal employers. See Moreau, 508 U.S. at 25-26. Despite congressional efforts to mitigate the effect of these amendments on municipal coffers, e.g., Kearns et al., supra § 11.V.B., at 687, the amendments triggered protracted litigation, as state and local public employers mounted constitutional challenges to the FLSA’s regulation of state-employer compensation schemes. See Moreau, 508 U.S. at 26 & n. 6 (collecting cases). In part, the employers were successful. See Nat’l League of Cities v. Usery, 426 U.S. 833, 851-52 (1976) (invalidating 1974 amendments to the FLSA to the extent that they “impermissibly interfere[d] with the integral governmental functions” of states and municipalities).
In February 1985, the Supreme Court upheld Congress’s power under the FLSA to regulate the payments due to state and local employees. See Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528 (1985). State and municipal authorities reacted with “grave concern” to the decision, due in part to “[t]he projected ‘financial costs of coming into compliance with the FLSA-particularly the overtime provisions.’ “ Moreau, 508 U.S. at 26 (quoting S.Rep. No. 99-159, at 8 (1985)).
In response, both the House and Senate held hearings on the issue “and considered legislation designed to ameliorate the burdens associated with necessary changes in public employment practice.” Id. Congress ultimately enacted several provisions designed to allay public employers’ fears and contain costs. See, e.g., id. Congress also delayed enforcement of the FLSA against state and local employers until April 15, 1986, to give them time to comply with the Act’s amended requirements. See Fair Labor Standards Amendments of 1985, Pub.L. No. 99-150, § 2(c), 99 Stat. 787, 788-89.
Section 207(k) was originally passed in 1974. The provision created a partial FLSA exemption for law enforcement and fire protection personnel (“public safety personnel”). See29 U.S.C. § 207(k). When Garcia held the FLSA applied to municipal employees, § 207(k) became very important to municipalities. See Martin v. Coventry Fire Dist., 981 F.2d 1358, 1361 (1st Cir.1992).
Under the FLSA, employees other than public safety personnel are generally entitled to payment “at a rate not less than one and one-half times” their regular wages for any time worked in excess of forty hours in a seven day period. 29 U.S.C. § 207(a)(1). However, the partial exemption in § 207(k) set a higher threshold number of hours that public safety personnel can work in a twenty-eight day work period-or a proportional number of hours in a shorter work period of at least seven days-before these employees become entitled to overtime compensation. See id. § 207(k).”
After discussing the elements of the 207(k) exemption in detail, the Court addressed the pointed issue in the case, holding that formal notice of the imposition of a 207(k) work schedule is not an element required for a municipality to reap its benefits. The Court reasoned, “Plaintiffs assert that the Town was required to give affected employees notice in order to establish a § 207(k) work period and qualify for the public safety exemption. Plaintiffs’ claim raises an issue of statutory interpretation and is before us on summary judgment. For both of these reasons, our review is de novo. See Chiang v. Verizon New England Inc., No. 09-1214, 2010 WL 431873, at *5 (1st Cir. Feb. 9, 2010). “We may affirm the district court on any basis apparent in the record.” Id.
We reject plaintiffs’ argument in light of § 207(k)‘s text and history, as well as the interpretive guidance given by the Department of Labor in its regulations. On the undisputed facts, the Town’s actions were sufficient to establish a qualifying work period, despite the asserted lack of notice to its employees. Summary judgment was appropriate.
We start with the statutory text. The text of § 207(k) does not specify that a public employer is required to establish a work period or identify how an employer might do so. Further, the text contains no requirement of notice to the affected employee. 29 U.S.C. § 207(k).
The Town points to related legislative history. Congress explicitly rejected a proposal mandating employee agreement before a § 207(k) work period could be established. Barefield v. Vill. of Winnetka, 81 F.3d 704, 710 (7th Cir.1996) (citing H.R.Rep. No. 953, 93d Cong., 2d Sess. (1974) (Conf.Rep.)); see also Agawam, 350 F.3d at 291 (noting that “employees’ approval is not required” under § 207(k)). The Town argues this is indicative that not only was no agreement required but no notice was required. This reading is consistent with Congress’s goal of “ensur[ing] that public agencies would not be unduly burdened by the FLSA’s overtime requirements.” Kearns et al., supra § 11.V.B., at 687; see alsoH.R. Rep. 93-913, at 2837-38 (1974) (describing the House’s original version of § 207(k), which provided for a complete overtime exemption for public safety personnel to help ensure that the FLSA would have a “virtually non-existent” impact on state and local governments).
It is true that § 207(k)‘s text does not prohibit giving notice either. However, Congress expressly delegated responsibility for implementing the statute to the Secretary of Labor, see Moreau, 508 U.S. at 27 (citing 29 U.S.C. § 203), who, after notice and comment, promulgated regulations, see52 Fed.Reg.2012;51 Fed.Reg. 13402 (Apr. 18, 1986). These regulations make it clear the Secretary rejected a notice requirement under § 207(k). Under these circumstances, “Congress clearly ‘expect[ed] the agency to be able to speak with the force of law,’ “ and we “must defer to the regulations’ resolution of a statutory ambiguity, so long as it is ‘reasonable.’ “ Rucker v. Lee Holding Co., 471 F.3d 6, 11 (1st Cir.2006) (quoting United States v. Mead Corp., 533 U.S. 218, 229 (2001)).
During rulemaking, the Secretary of Labor reviewed and rejected a proposal to impose a notice requirement for § 207(k). 52 Fed.Reg. at 2024-25. The Secretary observed that unlike other sections of the FLSA, which “require [ ] that there be an agreement or understanding concerning compensatory time prior to the performance of work, there is no requirement in the Act that an employer formally state its intention or obtain an agreement in advance to pay employees under section 7(k).” Id. at 2025 (emphasis added).
The resulting regulation, 29 C.F.R. § 553.224, plainly rejected both a requirement that municipalities make a formal statement of intention and a requirement that they obtain agreement. The regulation explains that “any established and regularly recurring period of work which, under the terms of the Act and legislative history, cannot be less than 7 consecutive days nor more than 28 consecutive days” suffices as a work period, noting that “[e]xcept for this limitation, the work period can be of any length, and it need not coincide with the duty cycle or pay period or with a particular day of the week or hour of the day.” Id. § 553.224(a).
Section 553.224‘s reference to an “established” work period is the foundation of plaintiffs’ claim that an employer must provide notice to employees to set up a § 207(k) work period. But § 553.224 includes no procedural steps of any kind, let alone a notice requirement.
Our caselaw reflects in dicta the Secretary’s interpretation that federal law in § 207(k) does not require notice to the affected employee, see Agawam, 350 F.3d at 291;see also id. at 291 n .21 (“The work period requirement is ordinarily not a high hurdle.”), as does the law in other circuits to have considered the issue, see Milner, 165 F.3d at 1223 (per curiam) (“[T]he [§ 207(k) ] exemption need not be established by public declaration.”); Spradling v. City of Tulsa, 95 F.3d 1492, 1505 (10th Cir.1996) (“[A] public employer may establish a 7(k) work period even without making a public declaration, as long as its employees actually work a regularly recurring cycle of between 7 and 28 days.”) (internal quotation marks and citation omitted); Barefield, 81 F.3d at 710 (finding a municipal employer entitled to § 207(k) exemption, even though the work schedule at issue predated the enactment of the provision and the employer “made no declaration of intent to come under Section 7(k)”) (internal quotation marks omitted).
Here, the Town has used a § 207(k)-compliant work period at all relevant times. The Town’s memo of April 11, 1986, shows that its “4-2” and “5-3” work cycles are component parts of a fixed, recurring twenty-four day work period. Cf. Agawam, 350 F.3d at 291 (rejecting public employer’s claim to the § 207(k) exemption when the employer used six-day work cycles and could “not point to a single statement or document indicating that it adopted a work period longer than six days”). Both of these schedules are consistent with the identified work period, as both divide evenly into a twenty-four day period. See Avery, 24 F.3d at 1344 (holding that a “five days on, two days off duty cycle, repeated four times” constitutes a “valid twenty-eight day work period”) (internal quotation marks omitted). Additional memoranda discussing the FLSA’s imminent effective date and expressing the Town’s intention to take advantage of the public safety exemption further support this conclusion.
Plaintiffs do not directly challenge the regulatory framework outlined above. They instead urge that a subsequent letter ruling by an administrator at the Department of Labor mandates a notice requirement and is entitled to deference by this court under Auer v. Robbins, 519 U.S. 452, 461 (1988), or Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). That argument was not properly presented to the district court and is waived. E.g., McCoy v. Mass. Inst. of Tech., 950 F.2d 13, 22 (1st Cir.1991). We nonetheless address the claim to ensure clarity on this point of law, and we reject plaintiffs’ assertion for three distinct reasons.
First, the administrator’s letter ruling made no mention of a notice requirement. It said only that “[a]n employer must designate or otherwise objectively establish the work period … and pay the affected employees in accordance with its provisions.” Dep’t of Labor Ltr. Rul. FLSA-1374 (Jan. 3, 1994). The letter’s emphasis on “objectively establish[ing]” a work period is not inconsistent with 29 C.F.R. § 553.224. To the contrary, it merely paraphrases the regulation’s requirement that employers make use of an “established and regularly recurring period of work,” id. § 553.224(a), in order to claim the benefits of the exemption.
Second, the letter responded to an inquiry regarding a specific decision by this court, Martin v. Coventry Fire Dist., 981 F.2d 1358 (1st Cir.1992), which addressed different issues. When responding to the inquiry, the administrator plainly stated that the letter ruling was “based exclusively on the facts and circumstances” presented. Dep’t of Labor Ltr. Rul. FLSA-1374. The letter is irrelevant to plaintiffs’ present argument.
Finally, “[i]nterpretations such as those in opinion letters … do not warrant Chevron-style deference.” Christensen v. Harris County, 529 U.S. 576, 587 (2000). To the contrary, such letters “are ‘entitled to respect’ … only to the extent that th[eir] interpretations have the ‘power to persuade.’ “ Id. (quoting Skidmore, 323 U.S. at 140). Here, the Secretary of Labor explicitly rejected the very position that plaintiffs ascribe to the administrator’s letter, stating clearly during rulemaking that employers need not formally declare their intentions to pay employees under § 207(k). 52 Fed.Reg. at 2024-25. Even if plaintiffs’ reading of the letter were accurate, the letter’s inconsistency with the Secretary’s earlier pronouncement would render it unpersuasive. See Skidmore, 323 U.S. at 140.”
Thus, the Court concluded, “Plaintiffs’ argument fails. The Town was not required to notify plaintiffs that it had established a § 207(k) work period. Summary judgment was appropriately granted.”
Overtime Law Blog 